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https://boards.fool.com/i-am-not-sure-when-the-child-has-control-of-the-11142850.aspx
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| Subject: Re: Education IRA - Is this allowed? | Date: 8/11/1999 11:14 PM | |
| Author: WorkingMomOfTwo | Number: 58678 of 284303 | |
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I am not sure when the child has control of the money but there are steep fees and taxes due when money from an educational IRA is withdrawn but not used for education expenses...for a college-bound child I would think one could convince them to use the IRA for college (to avoid the fees) and get a job if they want money for another expense. As far as whether this is legal, I would think not. You need to designate a beneficary for the account when it is established, can only contribute until the beneficiary becomes 18, and must close out the account by the time the beneficiary is 30. While you can change the beneficiary to your own child, there is a lot of rules to deal with and it may not be worth the time/effort. A single co-worker of mine decided to put money into a ROTH IRA for possible children he might have someday. You would have to read up on the details first but it sounded promising since you can use ROTH IRA money for college without penalities, keep control yourself, and can use any "excess" for your retirement. |
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